Insurance Professional

Long term care is a variety of services that includes medical and non-medical care to people who have a chronic illness or disability. Long term care insurance helps meet health or personal needs. Most long-term care is to assist people with support services such as activities of daily living like dressing, bathing, and using the bathroom. Long-term care can be provided at home, in the community, in assisted living or in nursing homes. It is important to remember that you may need long-term care at any age. You may never need long-term care. This year, about nine million men and women over the age of 65 will need long-term care. By 2020, 12 million older Americans will need long-term care.

We have assembled some of the cheapest resources for long term care insurance insurance on this page. Long-term care insurance policy is not for everyone. For a limited population, long-term care insurance makes sense as an affordable and worthwhile form of insurance. Buying long-term coverage should not cause financial hardship and force you to forego other financial needs. Whether long-term care insurance is appropriate requires a full financial analysis. For many people it is not a good idea. Although the need for long-term care can arise gradually as a person ages and needs more and more assistance with activities of daily living, for most a stroke or a heart attack will be the precipitating need. Those with acute illnesses may need nursing-home care for a matter of months, while others may need care for years.

What is long-term care?
Insurance is an important tool for protecting yourself against risk. For instance, health insurance pays your doctor and hospital bills if you get sick or injured. But how can you protect yourself against the significant financial risk posed by the potential need for long-term care services, either in a nursing home or in your own home? Long-term care goes beyond medical care and nursing care to include all the assistance you could need if you ever have a chronic illness or disability that leaves you unable to care for yourself for an extended period of time. You can receive long-term care in a nursing home, assisted living facility, or in your own home. Though older people use the most long-term care services, a young or middle-aged person who has been in an accident or suffered a debilitating illness might also need long-term care. Beyond nursing homes, there is a range of services available in the community to help meet long-term care needs. Visiting nurses, home health aides, friendly visitor programs, home-delivered meals, chore services, adult daycare centers, and respite services for caregivers who need a break from daily responsibilities can supplement care given by family members.

Are you likely to need long-term care?
You may never need long-term care. But about 19 percent of Americans aged 65 and older experience some degree of chronic physical impairment. Among those aged 85 or older, the proportion of people who are impaired and require long-term care is about 55 percent. By the year 2020, 12 million older Americans will need long-term care. Most will be cared for at home; family members and friends are the sole caregivers for 70 percent of elderly people. But a study by the U.S. Department of Health and Human Services indicates that people age 65 face at least a 40 percent lifetime risk of entering a nursing home. About 10 percent will stay there five years or longer. The American population is growing older, and the group over age 85 is now the fastest-growing segment of the population. The odds of entering a nursing home, and staying for longer periods, increase with age. In fact, statistics show that at any given time, 22 percent of those age 85 and older are in a nursing home. Because women generally outlive men by several years, they face a 50 percent greater likelihood than men of entering a nursing home after age 65. While certainly older people are more likely to need long-term care, your need for long-term care can come at any age. In fact, the U.S. Government Accountability Office estimates that 40 percent of the 13 million people receiving long-term care services are between the ages of 18 and 64.

What does long-term care cost?
Long-term care can be very expensive and the real amount you will spend depends on the level of services you need and the length of time you need care. One year in a nursing home can average more than $50,000. In some regions, it can easily cost twice that amount. Home care is less expensive but it still adds up. Bringing an aide into your home just three times a week (two to three hours per visit) to help with dressing, bathing, preparing meals, and similar household chores can easily cost $1,000 each month, or $12,000 a year. Add in the cost of skilled help, such as physical therapists, and these costs can be much greater. The average monthly fee assisted living facilities charge is around $2,000. This includes rent and most additional fees. Some residents in the facility may pay significantly more if their care needs are higher.

What are the types of long-term care policies?
Several types of policies are available. Most are known as "indemnity" or "expense incurred" policies. An indemnity or "per diem" policy pays up to a fixed benefit amount regardless of what you spend. With an expense-incurred policy, you choose the benefit amount when you buy the policy and you are reimbursed for actual expenses for services received up to a fixed dollar amount per day, week, or month. Today, many companies also offer "integrated policies" or policies with "pooled benefits." This type of policy provides a total dollar amount that may be used for different types of long-term care services. There is usually a daily, weekly, or monthly dollar limit for your covered long-term care expenses. For example, say you purchase a policy with a maximum benefit amount of $150,000 of pooled benefits. Under this policy you would have a daily benefit of $150 that would last for 1,000 days if you spend the maximum daily amount on care. If, however, your care costs less, you would receive benefits for more than 1,000 days.
There are no policies that guarantee to cover all expenses fully.

You usually have a choice of daily benefit amounts ranging from $50 to more than $300 per day for nursing home coverage. The daily benefit for at-home care may be less than the benefit for nursing home care. It's important to keep in mind that you are responsible for your actual nursing home or home care costs that exceed the daily benefit amount you purchased.
Because the per-day benefit you buy today may not be enough to cover higher costs years from now, most policies offer inflation adjustments. In many policies, for example, the initial benefit amount will increase automatically each year at a specified rate (such as 5 percent) compounded over the life of the policy.

Some life insurance policies offer long-term care benefits. With these accelerated or living benefits provisions, under certain circumstances a portion of the life insurance benefit is paid to the policyholder for long-term care services instead of to the beneficiary at the policyholder's death. Some companies make these benefits available to all policyholders; others offer them only to people buying new policies.

What do long-term care insurance policies cover?
Long-term care services are provided when a person cannot perform certain "activities of daily living" (ADLs), or is cognitively impaired because of senile dementia or Alzheimer's disease. Most commonly the ADLs used to determine the need for services include bathing, dressing, transferring (getting from a bed to a chair), toileting, eating, and continence.
Today's policies cover skilled, intermediate, and custodial care in state-licensed nursing homes. Long-term care policies usually also cover home care services such as skilled or nonskilled nursing care, physical therapy, homemakers, and home health aides provided by state-licensed and/or Medicare-certified home health agencies.
Many policies also cover assisted living, adult daycare, and other care in the community, alternate care, and respite care for the caregiver.
"Alternate care" is nonconventional care and services developed by a licensed health care practitioner that serve as an alternative to more costly nursing home care. Benefits for alternate care may be available for special medical care and treatments, different sites of care, or medically necessary modifications to the insured's home, like building ramps for wheelchairs or modifications to a kitchen or bathroom. A health care professional develops the alternate plan of care, the insured or insurer may initiate the plan, and the insurer approves it.
You should know that the benefit amount paid for alternate care would reduce the maximum or lifetime benefit available for later confinement in a long-term care facility. Policies may limit the expenses covered under this benefit (for instance, 60 percent of the lifetime maximum limit).
Alzheimer's disease and other organic cognitive disabilities are leading causes for nursing home admissions and worry for many older Americans. These conditions are generally covered under long-term care policies.

What is not covered?
All policies contain limits and exclusions to keep premiums reasonable and affordable. These are likely to differ from policy to policy. Before you buy, be sure you understand exactly what is and is not covered under a particular policy.
Preexisting conditions
Preexisting conditions are health problems you had when you became insured. Insurance companies may require that a period of time pass before the policy pays for care related to these conditions. For example, a company may exclude coverage of preexisting conditions for six months. This means that if you need long-term care within six months of the policy's issue date for that condition, you may be denied benefits. Companies do not generally exclude coverage for preexisting conditions for more than six months.
Specific exclusions
Some mental and nervous disorders are not covered. Alcoholism and drug abuse are usually not covered, along with care needed after an intentionally self-inflicted injury.

What should I look for in a policy?
The National Association of Insurance Commissioners has developed standards that protect consumers. You should look for a policy that includes:
At least one year of nursing home or home health care coverage, including intermediate and custodial care. Nursing home or home health care benefits should not be limited primarily to skilled care.
Coverage for Alzheimer's disease, should the policyholder develops it after purchasing the policy.
An inflation protection option. The policy should offer a choice among:
automatically increasing the initial benefit level on an annual basis,
a guaranteed right to increase benefit levels periodically without providing evidence of insurability.
An "outline of coverage" that systematically describes the policy's benefits, limitations, and exclusions, and also allows you to compare it with others. A long-term care insurance shopper's guide that helps you decide whether long-term care insurance is appropriate for you. Your company or agent should provide both of these.
A guarantee that the policy cannot be canceled, nonrenewed, or otherwise terminated because you get older or suffer deterioration in physical or mental health.
The right to return the policy within 30 days after you have purchased the policy and to receive a premium refund.
No requirement that policyholders:
first be hospitalized in order to receive nursing home benefits or home health care benefits,
first receive skilled nursing home care before receiving intermediate or custodial nursing home care,
first receive nursing home care before receiving benefits for home health care.

Before you buy
Insurance policies are legal contracts. Read and compare the policies you are considering before you buy one, and make sure you understand all of the provisions. Marketing or sales literature is no substitute for the actual policy. Read the policy itself before you buy.
Discuss the policies you are considering with people whose opinions you respect-perhaps your doctor, financial advisor, your children, or an informed friend or relative.
Ask for the insurance company's financial rating and for a summary of each policy's benefits or an outline of coverage. (Ratings result from analyses of a company's financial records.) Good agents and good insurance companies want you to know what you are buying.
And bear in mind: Even after you buy a policy, if you find that it does not meet your needs you generally have 30 days to return the policy and get your money back. This is called the "free look" period.
Do not give in to high-pressure sales tactics. Do not be afraid to ask your insurance agent to explain anything that is unclear. If you are not satisfied with an agent's answers, ask for someone to contact in the company itself. Call your state insurance department if you are not satisfied with the answers you get from the agent or from company representatives.

Long-term care policy checklist
Before you begin shopping, you should find out how much nursing home or home health care costs in your area today. If you needed care right away could you find it locally or would you have to go to another, potentially more expensive area? Once you've done some research, you can use the following checklist to help you compare policies you may be considering.
1. What services are covered?
Nursing home care
Home health care
Assisted living facility
Adult daycare
Alternate care
Respite care
Other
2. How much does the policy pay per day for nursing home care? For home health care? For an assisted living facility? For adult daycare? For alternate care? For respite care? Other?
3. How long will benefits last in a nursing home? At home? In an assisted living facility? Other?
4. Does the policy have a maximum lifetime benefit? If so, what is it for nursing home care? For home health care? For an assisted living facility? Other?
5. Does the policy have a maximum length of coverage for each period of confinement? If so, what is it for nursing home care? For home health care? For an assisted living facility?
6. How long must I wait before preexisting conditions are covered?
7. How many days must I wait before benefits begin for nursing home care? For home health care? For an assisted living facility? Other?
8. Are Alzheimer's disease and other organic mental and nervous disorders covered?
9. Does this policy require: An assessment of activities of daily living? An assessment of cognitive impairment? Physician certification of need? A prior hospital stay for nursing home care? Home health care? A prior nursing home stay for home health care coverage? Other?
10. Is the policy guaranteed renewable?
11. What is the age range for enrollment?
12. Is there a waiver-of-premium provision for nursing home care? For home health care?
13. How long must I be confined before premiums are waived?
14. Does the policy have a nonforfeiture benefit?
15. Does the policy offer an inflation adjustment feature? If so, what is the rate of increase? How often is it applied? For how long? Is there an additional cost?
16. What does the policy cost?
Per year?
With inflation feature
Without inflation feature
With nonforfeiture feature
Without nonforfeiture feature
Per month?
With inflation feature
Without inflation feature
With nonforfeiture feature
Without nonforfeiture feature
17. Is there a 30-day free look?

Source: http://www.pueblo.gsa.gov/cic_text/health/ltc/guide.htm